Homeowners will inevitably have questions from time-to-time about the financial workings of the association. As they pay their association assessments, homeowners may become curious about how their money is being spent and want to follow up on the spending habits of their HOA. So, do homeowners have a right to review the financial records of their HOA? The short answer is yes; homeowners have a right to access appropriate association documents and records when requested.
Most states have general statues that require access to financial records within a homeowner’s association, though laws do vary from state-to-state, whether extremely detailed to very vague. Procedures for how to access financial records should be published in the association’s bylaws and be made accessible to every member of the community.
What Information Can Homeowners Review?
Association members have a right to access (at minimum) the current budget, statement of income and expenses, records of receipts, and a balance sheet. Usually, they have the right to records from the previous three years, though this may vary.
Members do not, however, have the right to information that is specific to homeowners (such as a list of delinquent payments), bank account statements, or copies of the association’s QuickBook files.
How to Review Financial Records
The request to review financial documents is typically required to be submitted as a written request. The board is ultimately responsible for providing access to financial records; however, they may use the services of a management company.
The community CC&Rs will detail the process of who should be contacted to make specific requests and will also detail any fees that are associated with the process. HOAs are usually allowed to charge a reasonable fee associated with gathering and/or printing these documents. Once the written request is received, the HOA board is given a reasonable time to fulfill the request, although “reasonable time” is not usually well-defined and is somewhat open to interpretation.
The HOA or management company has a right to deny a resident’s request if they deem it to be frivolous or threatening. However, residents do have legal recourse options if their reasonable claims are denied. The board (or HOA management company) should do everything within its power to grant all reasonable requests and give the applicable documents to the homeowner as soon as possible.
